Ideas, Actors and Impact
Edited by Rune Ervik, Nanna Kildal and Even Nilssen
Chapter 9: Towards a European Convergence in Pension Policy Outputs? Evidence from the OMC on Pensions
Axel West Pedersen and Henning Finseraas INTRODUCTION The purpose of this chapter is to explore whether the pension reforms enacted by individual EU member countries over the last decade have produced common trends and/or convergence in the degree and pattern of income security offered to wage earners. We use data collected by the Social Protection Committee of the EU as part of the Open Method of Coordination (OMC) on pensions. The data contain information on current and so-called prospective replacement rates for hypothetical cases of workers in each of the member countries, and they offer a unique opportunity to compare the output of national pension systems before and after recently enacted reforms. If attempts at policy coordination and processes of policy diffusion from international and supra-national organizations like the OECD and the EU constitute important stimuli for current reforms in national pension systems, we should expect to find both common trends and convergence in the actual output of these reform processes. However, a possible convergence in policy outputs could merely be the result of common problem pressures and commonalities in the domestic policy environment. We should hasten to emphasize, therefore, that our sole ambition is to try to map changes in national policy outputs using data generated by the OMC process, as it is far beyond the scope of this chapter to assess any causal links. Population ageing and the prospect of rising dependency ratios in coming decades has put pension reform on the political agenda throughout Europe. A primary...